California WCMSA: Separate Settlements for Each Claim - The Benson Case

California WCMSA: Separate Settlements for Each Claim - The Benson Case

 By Robert G. Rassp, Esq.

Appellate review of California Labor Code Sections 4663 and 4664 on apportionment has mandated that physicians provide in their conclusions with reasonable medical probability approximately what percentage of permanent disability or impairment is directly caused by each industrial injury and what percentage is caused by “other factors” such as prior or subsequent injuries, prior awards of compensation, and non-industrial factors [see Benson v. Workers’ Comp. Appeals Bd. (2009) 170 Cal. App. 4th 1535, 89 Cal. Rptr. 3d 166, 74 Cal. Comp. Cases 113]. The Benson case has been used creatively to avoid scrutiny of settlements by CMS when parties enter into separate compromise and release agreements for under $25,000.00 for each claimed injury.

In May 2011, CMS reiterated in a memorandum to its regional offices that workers’ compensation lump sum settlements under $25,000.00 are not within CMS’ “threshold of review” and a WCMSA is not required even though CMS may still review any settlement that purports to shift responsibility for future medical treatment from a primary payer to Medicare.

In some cases in which there are two admitted specific injuries and a cumulative trauma claim, it is not unusual for counsel to enter into three compromise and release settlements, each for $24,999.99, rather than a joint compromise and release for $75,000.00 as an attempt to avoid having to include a WCMSA. It remains to be seen whether CMS would challenge this tactic, but such piecemeal settlements are technically consistent with the California Court of Appeal decision in Benson.

IMPORTANT NOTE TO WCJ’s: All California workers’ compensation judges have access to the online version of Robert Rassp’s legal analysis of California WCMSAs. Click here for access. (Be sure you're logged onto your account.)

© Copyright 2012 LexisNexis. All rights reserved. This article was excerpted from the NEW AND ENHANCED 2012 EDITION of The Complete Guide to Medicare Secondary Payer Compliance (now on sale at the LexisNexis Store).